Hi Bleachbit,
I never heard him say he sold out after or during a decline.
He was always a hold until a multiple gain had been made.
He never trusted management or news.
He always new manipulation would require patience and large gains.
Of course he had losses with stocks that failed.
His one saving grace was diversification.
I'm really guessing as he never had expressed a sell strategy, but I'm guessing it is a lot like how I feel about a stock. If it is a good stock and they treat the shareholders well, you keep buying on breakouts to new highs.
If you buy low, and ride the new highs with add to's, the gainers exceed the low cost busts.
Ted was elderly when I met him, and his gains had already secured his modest but successful lifestyle.
He had succeeded in a basic common sense way. Enough so that he traded but traveled the world a lot.
We had the privilege of calling him during general market downtrends, which turned out to be scoldings for "watching the market too closely".
If one had bought at low level consolidations, one should never consider taking a loss, but they could be imposed on you. <smile>.
When you learned to erase the fear of loss, you had entered the world of confident investolating.
That didn't mean you would not take a loss on a bad stock, but the average multi-bagger with patience would get you to a wonderful way of life, in the long term.
There is a lot to be said about letting your winners run, and avoiding paying capital gains on large long term winners. ALA Peter Lynch.
Long term winners end up, with sector maturity, paying dividends, which if owned for a long time pay a substantial yield on a low cost basis. Dividends are taxed at a lower rate. Much easier to pay the dividend's annual tax vs. a 6 bagger gain on a low cost stock. that may not be achievable again.
Ted's wealth was accumulated over 60 to 70 years. He was frugal but comfortable living in Redondo Beach and traveling a lot.
He was also comfortable with commodities. A world I've never been comfortable with.
You are correct about his watching for stable price action during declines, it caught his focus on further accumulation.
Good to have you here adding to the group's conversation here.
Bob |
